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As of March 1, 2013, the Legal Information Institute is no longer maintaining the information in the American Legal Ethics Library. It is no longer possible for us to maintain it at a level of completeness and accuracy given its staffing needs. It is very possible that we will revive it at a future time. At this point, it is in need of a complete technological renovation and reworking of the "correspondent firm" model which successfully sustained it for many years.

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Arkansas Disciplinary Rules of Professional Conduct

[1] A lawyer should hold property
of others with the care required of a professional fiduciary. Securities should
be kept in a safe deposit box, except when some other form of safekeeping is
warranted by special circumstances. All property which is the property of clients
or third persons should be kept separate from the lawyer's business and personal
property and, if monies, in one or more trust accounts. Separate trust accounts
may be warranted when administering estate monies or acting in similar fiduciary
capacities.

[2] While normally it is impermissible to commingle the lawyer’s own funds with client funds, paragraph (b)(3) provides it is permissible when necessary to pay bank service charges on that account. Accurate records must be kept regarding which part of the trust account funds are the lawyer’s.

[3] Lawyers often receive funds from which the lawyer’s fee will be paid. The lawyer is not required to remit to the client funds that the lawyer reasonably believes represent fee owed. However, a lawyer may not hold funds to coerce a client into accepting the lawyer’s contention. The disputed portion of the funds must be kept in a trust account and the lawyer should suggest means for prompt resolution of the dispute, such as arbitration. The undisputed of the funds shall be promptly distributed.

[4] Paragraph (a)(6) also recognizes that third parties may have lawful claims against specific funds or other property in a lawyer’s custody, such as a client’s creditor who has a lien on funds recovered in a personal injury action. A lawyer may have a duty under applicable law to protect such third-party claims against wrongful interference by the client. In such cases, when the third party claim is not frivolous under applicable law, the lawyer must refuse to surrender property to the client until the claims are resolved. A lawyer should not unilaterally assume to arbitrate a dispute between the client and the third party, but, when there are substantial grounds for dispute as to the person entitled to the funds, the lawyer may file an action to have a court resolve the dispute.

[5] The obligations of a lawyer under this Rule are independent of those arising from activity other than rendering legal services. For example, a lawyer who serves only as an escrow agent is governed by the applicable law relating to fiduciaries even though the lawyer does not render legal services in the transaction and is not governed by this Rule.

[6] A lawyers’ fund for client protection provides a means through the collective efforts of the bar to reimburse persons who have lost money or property as a result of dishonest conduct of a lawyer. Where such a fund has been established, a lawyer must participate where it is mandatory, and, even when it is voluntary, the lawyer should participate.

Code Comparison

With regard to Rule
1.15(a), DR 9-102(A) provides that "funds of clients" are to be kept in
an identifiable bank account in the state in which the lawyer's office is situated.
DR 9-102(B)(2) provides that a lawyer shall "identify and label securities and
properties of a client . . . and place them in . . . safekeeping . . . ." DR
9-102(B)(3) requires that a lawyer "[m]aintain complete records of all funds,
securities, and other properties of a client . . . ." Rule 1.15(a) extends these
requirements to property of a third person that is in the lawyer's possession
in connection with the representation.

Rule 1.15(c) is
substantially similar to DR 9-102(A)(2), except that the requirement regarding
disputes applies to property concerning which an interest is claimed by a third
person as well as by a client.